What to Know:
- XRP’s recent rally faced strong resistance around $2.40-$2.50, indicating a potential bearish retest.
- Key support levels to watch are between $2.32 and $2.28; a break below could lead to further declines.
- A trend reversal requires XRP to establish a higher high and lower low above $2.65, suggesting caution for bulls.
XRP’s recent surge has encountered significant resistance, stalling its upward momentum. After a strong rebound from below $2.20, the price faced rejection near $2.40-$2.50, an area marked by moving averages and previous breakdown levels. This resistance highlights the challenges XRP faces in overcoming bearish market structures.
The current chart pattern reveals a rising wedge formation from late October, characterized by higher lows but diminishing momentum and muted volume. A breakdown from this wedge pattern could lead to lower prices, especially if the Relative Strength Index (RSI) fails to maintain its bullish trend. Bulls need to reclaim the $2.58-$2.65 range to challenge the 200-EMA zone between $2.80 and $2.85.
Failure to hold support between $2.32 and $2.28 could open the door for further declines towards $2.20, followed by $2.05 and $2.00. The volume profile indicates strong selling pressure near resistance, suggesting that the recent bounce is more of a countertrend rally than a genuine reversal. XRP must establish a higher high and lower low above $2.65 to confirm a shift in market sentiment.
Traders should exercise caution and manage risk effectively during this period of uncertainty. A sustained move above $2.65, accompanied by a flattening or flipping of moving averages, would signal a potential bullish opportunity. However, a close back inside the wedge body, coupled with a drop in momentum below RSI 45, could trigger another leg down to test the October base.
In conclusion, XRP’s price action suggests a cautious approach is warranted, with key levels to monitor for potential bullish or bearish signals. Investors should closely observe volume and momentum indicators to gauge the strength of any potential trend reversals.
Source: Original article
